2001 (5) TMI 974 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the High Court to decide the matter.
2. Territorial jurisdiction concerning the defendants and vessels from Andhra Pradesh.
3. Jurisdiction concerning the mortgaged property registered in Andhra Pradesh.
4. Jurisdiction concerning the vessel registered in Andhra Pradesh.
5. Jurisdiction in view of the establishment of Tribunals under the Recovery of Debts due to Banks and Financial Institutions Act (D.R.T. Act).

Issue-Wise Detailed Analysis:

1. Jurisdiction of the High Court to Decide the Matter:
The primary contention is whether the admiralty jurisdiction of the High Court is ousted by the D.R.T. Act. The court examined the historical context of admiralty jurisdiction, which was conferred on the Bombay High Court by various legislative instruments, including the Letters Patent of 1862 and 1865, and the Indian Legislature's Act 16 of 1891. The plaintiffs argued that admiralty jurisdiction is preserved under Article 225 of the Constitution of India, which maintains the jurisdiction of the High Court unless explicitly curtailed by a law enacted under Entry 95 of List I of the Seventh Schedule of the Constitution. The court concluded that the D.R.T. Act, being a general legislation for debt recovery, does not specifically curtail the admiralty jurisdiction of the High Court. Hence, the High Court retains its jurisdiction to entertain the suit.

2. Territorial Jurisdiction Concerning the Defendants and Vessels from Andhra Pradesh:
The defendants argued that since the vessels and defendants are from Andhra Pradesh, the Bombay High Court lacks jurisdiction. The plaintiffs countered that part of the cause of action arose in Bombay, as the loan agreements and mortgage deeds were executed there, and the repayment was to be made in Bombay. The court agreed with the plaintiffs, stating that under Section 51 of the Merchant Shipping Act and Section 3(15) of the same Act, the High Court in whose jurisdiction part of the cause of action arises has the jurisdiction to entertain the suit.

3. Jurisdiction Concerning the Mortgaged Property Registered in Andhra Pradesh:
The court reiterated that the admiralty jurisdiction of the High Court is not ousted by the D.R.T. Act. It emphasized that the mortgage of a ship, a movable property, is a unique feature under the Merchant Shipping Act, which allows the High Court to entertain claims for recovery of amounts due under such mortgages. The court held that the registration of the mortgaged property in Andhra Pradesh does not affect the jurisdiction of the Bombay High Court, as part of the cause of action arose in Bombay.

4. Jurisdiction Concerning the Vessel Registered in Andhra Pradesh:
The court examined Section 51 of the Merchant Shipping Act and concluded that it provides the High Court with jurisdiction to entertain claims related to mortgaged ships. Since the agreements were executed in Bombay and the repayment was to be made there, part of the cause of action arose in Bombay. Thus, the Bombay High Court has jurisdiction over the suit, despite the vessel being registered in Andhra Pradesh.

5. Jurisdiction in View of the Establishment of Tribunals under the D.R.T. Act:
The defendants argued that the D.R.T. Act ousts the jurisdiction of the High Court. The court analyzed Sections 17, 18, and 34 of the D.R.T. Act and concluded that the Act does not specifically exclude the admiralty jurisdiction of the High Court. The court emphasized that admiralty jurisdiction includes the right to proceed in rem against a vessel, which is not provided for under the D.R.T. Act. The court also noted that the Merchant Shipping Act, which was amended after the enactment of the D.R.T. Act, continues to confer jurisdiction on the High Court for claims related to mortgaged ships. Therefore, the court held that the D.R.T. Act does not oust the admiralty jurisdiction of the High Court.

Conclusion:
The court concluded that it has jurisdiction to entertain the suit, answering all the issues in the affirmative. The suit is maintainable in the admiralty jurisdiction of the Bombay High Court, despite the vessels and defendants being from Andhra Pradesh and the existence of the D.R.T. Act. The court directed the parties to act on the copy of the order and expedited the issuance of a certified copy.